Trump’s Reciprocal Tariffs Push U.S. Revenue Near $30 Billion in August

Economic

Summary:

Tariff revenues surged to $29.5 billion in August, marking the first full month of President Trump’s “reciprocal” tariff regime. While boosting U.S. coffers, the measures contributed to price pressures in sectors like food and apparel and face ongoing legal challenges that could affect the longevity of the gains....

Tariff Revenue Hits New Heights

August marked the first complete month of revenue collection under Trump’s new “reciprocal” tariffs, which imposed duties ranging from 10% to 50% on various imported goods. The $29.5 billion collected surpassed July’s $27.7 billion and represented a steady increase from May and June, which brought in $22.2 billion and $26.6 billion, respectively. Fiscal year-to-date totals now stand at around $165.2 billion.

Despite the headline figure, tariffs still constitute a modest portion of overall government receipts. With total August receipts topping $344 billion, tariff income accounted for less than 10% of total collections. Meanwhile, government spending for the month reached $689 billion, leaving a deficit of $345 billion.

Impact on Inflation and Consumer Prices

Economists have linked the August consumer price report to the tariff measures, highlighting that price increases in categories such as food and apparel were influenced by the duties. RSM chief economist Joe Brusuelas noted that these increases could be directly traced to tariffs, showing that the costs are often passed along to consumers.

A significant portion of the new “reciprocal” tariffs is currently facing legal scrutiny. Two courts have deemed parts of the program potentially unlawful under the 1977 International Emergency Economic Powers Act, and a final ruling from the Supreme Court is expected later this year. Treasury Secretary Scott Bessent has warned that an adverse decision could force the government to return roughly half of the revenues collected under these measures.

Other tariff revenues, levied under more secure legal authority, remain unaffected by the ongoing litigation. This distinction will be crucial in determining the sustainability of the new revenue stream.

The Trump administration has highlighted the tariffs as a tool to bolster federal finances and correct perceived fiscal mismanagement. While the windfall is being publicly celebrated, it remains relatively small in the context of overall receipts and does not offset the substantial monthly deficits the government continues to run.

Source: Reuters

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Economic

Commodity

Oversupply Pressures Weigh on Oil

Oil markets continued to face headwinds after sharp declines in the previous session, driven by concerns over persistent global oversupply. The International Energy Agency (IEA) highlighted in its monthly report that global oil production is expected to rise faster than previously anticipated in 2025 due to output increases by OPEC+ members, including Russia. This surge in supply has outpaced global demand growth, despite OPEC maintaining its relatively strong forecasts for 2025–2026.

Saudi Arabia is leading the charge, pushing to regain market share, with crude exports to China projected to rise to 1.65 million barrels per day in October from 1.43 million in September. Market analysts, however, question whether China can continue absorbing this volume while keeping OECD inventories at manageable levels.

Geopolitical and Regional Supply Factors

Despite the geopolitical risks from conflicts in the Middle East and the ongoing war in Ukraine, which could threaten supply, market participants remain focused on structural oversupply. Russian oil revenues fell in August to levels not seen since the start of the Ukraine conflict, and the country plans to reduce ESPO Blend shipments from the Kozmino port to roughly one million barrels per day in September.

Demand-side concerns also weighed on prices. Recent U.S. data showed the fastest rise in consumer prices in seven months for August, alongside a notable increase in first-time unemployment claims. While these indicators point to potential economic moderation, expectations of Federal Reserve interest rate cuts could stimulate growth and future oil consumption.

U.S. crude inventories also rose by 3.9 million barrels to 424.6 million barrels last week, according to the Energy Information Administration, reinforcing the market’s view that supply continues to exceed immediate demand.

The combination of structural oversupply, rising exports from major producers, and cautious U.S. demand projections suggests continued pressure on oil prices in the near term. Traders are balancing geopolitical risk premiums with the reality of a surplus market, leaving benchmarks like Brent and WTI under persistent downward pressure despite isolated factors supporting higher prices.

Source: Reuters

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Economic

Forex

Dollar Under Pressure Amid U.S. Economic Data

The U.S. dollar continued its decline on Friday, trading at 97.585 on the dollar index, following a two-day rally. This downward trend reflects growing investor anticipation of Federal Reserve rate cuts in response to economic signals. New weekly jobless claims in the U.S. rose at the fastest pace in four years, signaling softness in the labor market. Meanwhile, August’s inflation data showed prices rising at the fastest rate in seven months but remained broadly in line with expectations.

The mixed economic data has created some uncertainty around Fed policy. However, the market consensus currently favors a 25 basis point cut at the Federal Open Market Committee meeting on September 17, with investors tempering expectations for a larger 50 basis point cut later in the year. Benchmark 10-year Treasury yields ticked up slightly to 4.0282%, recovering from recent declines that nearly dipped below 4%, yet still reflecting overall easing expectations.

Currency Market Movements

Against major currencies, the dollar held relatively steady. It traded flat at 147.27 yen after a joint statement from U.S. and Japanese authorities emphasized that exchange rates should remain market-determined, warning against disorderly moves. The euro dipped to $1.1727 as traders reassessed prospects for further European Central Bank cuts following ECB comments suggesting a balanced risk outlook.

Other currencies saw minor movements: the Australian dollar rose slightly to $0.6665, near a 10-month high, while the New Zealand dollar slipped to $0.5971. Sterling weakened to $1.3572, and the offshore yuan remained essentially flat at 7.1135 per dollar.

The combination of rising jobless claims and moderate inflation strengthens the case for Fed rate cuts, although the market is cautious about the magnitude and timing of further easing. Investors are closely monitoring these indicators to assess the potential impact on borrowing costs, bond yields, and currency valuations in the near term.

Source: Reuters

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Stocks

Global Market Rally Driven by Fed Outlook

Asian markets followed Wall Street’s lead on Friday, with Japan, South Korea, and Taiwan achieving all-time highs. The market optimism stems from growing expectations that the Federal Reserve will implement several interest rate cuts in the coming months, reducing borrowing costs worldwide. Lower rates have relieved pressure on bond markets and contributed to a weaker U.S. dollar, supporting equities.

The recent U.S. consumer price report, which feeds into the Fed’s preferred core personal consumption expenditures (PCE) measure, showed relatively soft inflation, allowing policymakers flexibility to ease monetary policy. Analysts at Citi forecast the August core PCE at 2.9%, reinforcing expectations for further Fed rate reductions. Investors currently price in a near-certain quarter-point cut at the upcoming FOMC meeting, with a 90% probability of two additional cuts later this year.

Asian Equities Performance

Japan’s Nikkei rose 0.6%, extending its weekly gain to 3.7%, while South Korea’s KOSPI added 1.1%, bringing weekly gains above 5%. Chinese blue chips edged up 0.2%, reaching their highest level since early 2022. The MSCI Asia-Pacific index excluding Japan climbed 1.2%, reflecting broad regional strength. AI-related growth expectations were cited as a key driver behind these record peaks, especially in tech-heavy sectors.

European indices also saw modest gains, with EUROSTOXX 50, FTSE, and DAX futures rising 0.3%. S&P 500 and Nasdaq futures remained flat after hitting record highs in the previous session. In currency markets, the dollar traded at 147.23 yen, slightly off a recent high, while the euro held at $1.1730 after the European Central Bank signaled no immediate rate changes, suggesting the ECB may be nearing the end of its easing cycle.

Commodity Markets

Gold remained near record levels at $3,633 an ounce, slightly below the week’s peak of $3,673.95. Oil prices slipped due to a projected global surplus next year, with Brent crude down 0.4% at $66.09 per barrel and U.S. crude falling 0.5% to $62.07 per barrel, following IEA forecasts and continued OPEC production.

The combination of anticipated U.S. monetary easing, soft inflation data, and AI-driven growth expectations has propelled Asian markets to new heights. While European markets and commodities reacted modestly, global investors remain focused on central bank policy shifts and their implications for equity and bond markets.

Source: Reuters

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Economic

China’s Response to Mexico’s Tariff Plans

China’s Ministry of Commerce issued a statement urging Mexico to “think twice” before implementing higher tariffs on Asian-made vehicles, particularly from China. The ministry emphasized the importance of Sino-Mexican trade relations and warned that countermeasures may be taken to protect China’s economic interests.

Mexico’s proposed tariff increase from the current 20% to 50% still requires Congressional approval and would affect $52 billion in imports. The plan is part of Mexico’s broader federal budget proposal, aimed at addressing trade imbalances and protecting its domestic auto industry, which remains the country’s largest employer.

Geopolitical and Trade Context

The tariff discussion emerges amid ongoing global trade tensions, particularly involving the U.S. China has previously responded to U.S. tariffs with restrictions on exports of minerals critical to auto production and advanced technology. Chinese companies dominate the global supply chains for many of these materials, giving Beijing leverage in trade negotiations.

Mexico’s geographical position under the United States-Mexico-Canada Agreement (USMCA) allows tariff-free trade with the U.S. and Canada. However, the USMCA requires a higher portion of vehicles to be manufactured within the region compared to its predecessor, NAFTA.

Impact on Chinese Automotive Investment in Mexico

Despite the tariff threats, Chinese automakers have been expanding investments in Mexico. Over $7 billion has been pledged by more than 20 Chinese companies since June 2022, although some projects, such as BYD’s long-anticipated factory, remain incomplete. China’s electric cars have been capturing market share, primarily from other Asian brands rather than Western competitors. Analysts suggest that even with higher tariffs, the competitive pricing and value proposition of Chinese vehicles in Mexico could sustain demand.

Eugene Hsiao of Macquarie Capital highlighted that Chinese vehicles in Mexico are often competing with other Asian brands rather than displacing Western vehicles. Comparatively, Brazil imposed 35% tariffs on electric cars in July, while Russia applies 60% tariffs to Chinese cars, indicating that China may assess tariff disputes on a case-by-case basis depending on strategic trade interests.

China’s warning underscores the delicate balance in global automotive trade, where tariff policies can have ripple effects across production, investment, and market share. As Mexico considers its tariff hike, both countries face a test of maintaining economic cooperation while protecting domestic industries and strategic trade positions.

Source: Reuters

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MarketPulse by OANDA Group

Cryptocurrency

Forex

Economic

US equities surged again after the CPI release, with all major indices — S&P 500, Nasdaq, and Dow Jones — notching fresh all-time highs.The US dollar has been struggling with rate markets are now progressively betting ofn a 50 bps FOMC cut, though expectations remain fluid.Indeed, the immediate post-CPI reactions took some of that pricing back, before re-upping the odds just above 10%.Players will now expect hints from journalists such as Wall Street Journal’s Timiraos, the usual suspect for pre-FOMC FED insights.

However, cryptocurrencies are lagging this risk-on rally.While Bitcoin rebounded since its past week $108,000 lows, Ethereum is still trying to regain upside momentum.The broader altcoin and crypto complex has yet to reflect the same strength seen in equities and other risk assets since the morning session.With traders now turning to next week’s FOMC decision, crypto markets await a progressing technical outlook.Let’s peak at the current Crypto Market picture before diving in a multi-timeframe Ethereum analysis.

The Crypto Market picture in today’s CPI session

Ethereum Tries To Gather Momentum After CPI Report_1

Crypto market overview, September 11, 2025 – Source: Finviz

The Crypto picture is very mixed overall – watch other risk assets and market leaders (Solana in today’s session) to spot how flows evolve.

A multi-timeframe Ethereum analysis

Ethereum Daily Chart

Ethereum Tries To Gather Momentum After CPI Report_2

Ethereum Daily Chart, September 11, 2025 – Source: TradingView

Since our last analysis of the second largest crypto, prices have consolidated above the 4,200 to 4,500 momentum pivot.Momentum has now decreased from extremely overbought levels back to right above neutral which allows for further potential action to develop.The combination of both price and momentum consolidation provides a floor for higher volatility in the upcoming weeks.Despite the lack of momentum, if sentiment stays positive as it is, ETH has formed a floor on which to bounce on.The balance to this potential outcome however would be a failure to rebound from here which can lead to a lower interest in cryptos, which would be detrimental for the digital asset Market.

Momentum attracts momentum!

Ethereum 1H Chart

Ethereum Tries To Gather Momentum After CPI Report_3

Ethereum 1H Chart, September 11, 2025 – Source: TradingView

Looking closer highlights how strong the ongoing range is.

Buyers will have to maintain the upward trendline as a few breakout attempts got rejected during the ongoing session.Consolidating above $4,400 could provide the necessary boost for an upside breakout, but will require a concrete breakout above the consolidation highs (around the $4,500 level).

Levels of interest for ETH trading:

Support Levels:

● Consolidation Support 4,250 to 4,280

● $4,200 to $4,500 consolidation Zone (getting tested)

● $4,000 to $4,095 Main Long-run Pivot

● $3,500 Main Support Zone

Resistance Levels:

Consolidation resistance $4,480 to $4,500

● $4,950 Current new All-time highs

● $4,700 to $4,950 All-time high resistance zone

● Potential main resistance $5,230 Fibonacci extension

A look-back at the ETH/BTC chart

Ethereum Tries To Gather Momentum After CPI Report_4

ETH/BTC Daily Chart, September 11, 2025 – Source: TradingView

Crypto market depth is currently stalling as translated by the most recent slowdown in the ETH/BTC ratio, however with the correction currently stalling, it will be time for crypto aficionados to flex their muscles to lift crypto market sentiment.A rise in the crypto ratio is typically favorable for the Market and with ETH’s most recent top, other altcoins are looking at their big brother to get started again.

On the other hand, Solana is still powering through. Keep an eye on the ETH/SOL relative performance.A potential rally from here due to the ongoing consolidation may change market dynamics, therefore keep a close eye on the general crypto market sentiment.

Source: MarketPulse by OANDA Group

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Economic

Commodity

Gold and Silver Surge on Rate-Cut Outlook

Gold is approaching $3,650 an ounce, marking nearly a 2% rise this week and extending its winning streak to a fourth consecutive week. Silver has similarly advanced, topping $42 an ounce, the highest level since 2011. Investors are responding to the anticipation that the Federal Reserve will reduce borrowing costs, with traders pricing in at least a 25-basis-point cut at the upcoming Fed meeting and possibly additional cuts before year-end.

August U.S. consumer price data, which rose as expected, coupled with weaker labor-market indicators, provides the Fed with room to lower rates. Lower interest rates, declining 10-year Treasury yields, and a softer U.S. dollar generally support higher gold prices, making bullion a more attractive store of value.

Strong Year-to-Date Performance and ETF Inflows

Gold has rallied by 39% this year, outpacing major stock indices, including the S&P 500. The surge is underpinned by central-bank purchases, geopolitical uncertainties, and robust inflows into gold-backed ETFs. Bloomberg data indicates that ETFs have expanded by nearly 25 tons just this week, reflecting strong investor appetite for physical and ETF-linked bullion.

BMI, a Fitch Solutions company, notes that while geopolitical tensions could push prices higher, most of the potential gains from the anticipated September Fed rate cut are already priced in.

Geopolitical and Regional Influences

Gold has also been indirectly supported by political developments in the U.S., including President Trump’s appeal to influence the Federal Reserve, adding to market uncertainty.

In Asia, Thai households are expected to increase gold purchases for the fifth consecutive year. A stronger local currency has made bullion more affordable, complicating the Bank of Thailand’s efforts to moderate gold’s influence on the baht.

Other Precious Metals

Palladium is poised for a nearly 8% weekly gain, while platinum has edged higher. These movements reflect broader investor interest in precious metals as a hedge against economic uncertainty and potential policy changes.

Gold continues to attract strong investor demand as expectations of Fed rate cuts, a weaker U.S. dollar, and ongoing geopolitical tensions provide bullish support. ETF inflows, combined with regional buying trends, suggest sustained interest in bullion, though most near-term gains related to anticipated monetary easing are largely priced in.

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